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How has the Real Estate industry changed in the last 20 years and what companies are leading the charge for disruption currently?
Hello! Thanks for your question about how the real estate industry has changed in the past 20 years. The short version is that most prominent change in the real estate industry in the past 20 years is the rise of technology. There are also a number of companies leading the charge for disruption by incorporating technology. Below you will find a deep dive of my findings.
METHODOLOGY
As per your request, I began searching for articles detailing the key changes in the real estate industry in the past 20 years. I discovered one article that was very informative but could then only find one other pertaining to the past 10 years as all other references were more than 2 years old. These two articles are what I have based my findings on. The combined articles identified 9 key changes, 6 of these relating to the rise of technology. Therefore, as you will see below, I have gone into detail about technology being the key change over the past 20 years. I have also followed this with some detail about the lesser changes.
With regard to the key companies leading disruptions in the real estate industry, sources were more readily available. As you will see below, I have provided a short summary of each of the companies identified in these articles.
KEY CHANGE: THE RISE OF TECHNOLOGY
A big change that the Millennial demographic is bringing to the real estate market is their use of the internet. More than 50% of Millennials use mobile technology to search for homes and 26% of this group then go on to purchase a home via this method. This change has also forced the role of agents and brokers to change. In the past, it was a necessity to use an agent to find a suitable property, but these days, nearly every house is already able to be viewed online. With all this information readily on hand, customers are now more knowledgeable than ever and almost become experts themselves. In turn, they expect real estate agents to know more than they do and to have the answers to their hard questions.
This being said, the rise of social media has also brought about new ways for brokers and agents to engage with their customers. But with the availability of information online, agents really need to be active on social media and make their customers feel that there's a genuine interest in helping them find a new home.
The way customers communicate is also a major change in relation to the rise of technology. Millennials, in particular, prefer to communicate via text, email or social media as opposed to more traditional methods such as phone calls. This change requires agents to be available on multiple platforms and ensure quick response times.
Homes are also selling more quickly with the exposure properties have on the internet. The first view customers now have is via the internet, whereas in the past, a physical visit was required. This speeds up the whole process and avoids wasting time on viewing properties that aren't suitable.
OTHER NOTABLE CHANGES
While the rise of technology seems to be the major change in the real estate industry over the past 20 years, some smaller changes are also worth recognizing. One such example is the fact that people are more inclined to rent. This tends to be because properties have been known to lose value, down payments are high and the cost of repairs is not something customers want to worry about.
One other notable change is that customers are now looking for communities that are 'walkable'; with amenities and transportation with walking distance. This is specific to the retiree and Millennial demographics.
COMPANIES LEADING THE CHARGE FOR DISRUPTION
Bowery
Bowery are using big data to change the appraisal process. They use comparable data and public records to create custom in-depth reports to find accurate appraisal values.
Flip
Flip are aiming to make sub-leasing easier by creating a platform similar to Airbnb. Detailed renter information is available to landlords, such as, credit scores and history of timely rent payments. This process brings transparency of renters past behaviors for landlords.
Ravti
Ravti provide an effective solution to the worries involved with repairs and maintenance costs for owners and property managers. They use intelligent software to reduce cost by 18% to 30%.
onTarget
This is a cloud-based app that helps all those involved in a construction project to connect in the one place. Managers, contractors, investors and vendors can work together to ensure projects are on schedule and successful.
Enertiv
Enertiv gives property managers and owners real-time data on their property's energy usage. It also combines weather reports to correlate changes in usage with changes in weather conditions, allowing adjustments for money-saving methods, if necessary.
hOM
This company turns apartment building with high turnover rates into lifestyle centers, offering events such as fitness classes or professional or social events. This helps owners reduce turn over and improves profitability.
Redefy
Redefy employs both field agents and in-house agents; the first focusing on traditional methods and the latter focusing on digital paperwork. They also use technology heavily to generate leads through platforms such as email marketing and search engine optimization.
Houwzer
This company charges sellers $345 to list their properties on the three largest real estate portals, realtor.com., Zillow and Trulia. They also build relationships with sellers through the use of testimonials and referral discount and many sellers, in turn, become future buyers and customers.
Keller Williams
This company is investing heavily in real estate technology in order to combat disruption. They are looking to protect the traditional real estate industry and the needs of brokers and agents.
SUMMARY
To wrap up, the most prominent change in the real estate industry in the past 20 years is the rise of technology. There are a number of companies leading the charge for disruption, many using the method of incorporating technology.
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